Taking Your Current Property Tax Basis With You
When You Downsize at Age 55 and Older.
About Proposition 60, 90, & 110.
The Transfer of Base Year PropertyTax.
The information below answers some typical questions regarding how homeowners can transfer the benefits of Prop 13 to a replacement property. We have done some research regarding this and have summarized the information and qualifications regarding Propositions 60, 90, & 110 as follows:
1. What are Propositions 60, 90, & 110?
Ordinarily, when the ownership of California real property changes, the property is reassessed at its purchase price and the new owner pays property tax based on the reassessment. Props 60/90/110 can change that and benefit individuals meeting certain criteria. These propositions are constitutional amendments approved by the voters of California. They provide the transfer of a property’s base year value from an existing residence to a replacement residence, under certain conditions, for qualified persons over the age of 55 or persons of any age who are severely and permanently disabled.
2. What are the conditions that need to be met in order to qualify for Propositions 60/90/110 exclusions?
a. Both properties must be located in the same county under Proposition 60. Proposition 90 allows inter-county base year value transfers if the county in which the replacement residence is located has an ordinance to participate with Prop. 90. California Counties participating with Prop 90 can change year-to-year so do your research at the phone number below.
b. As of the date of transfer of the original property, the transferor (seller) or a spouse residing with the transferor must be at least 55 years of age or (under Prop. 110) be severely or permanently disabled.
c. At the time of sale, the original property must have been eligible for the Homeowners’ Exemption or entitled to the Disabled Veterans’ Exemption.
d. Generally, the replacement dwelling must be of equal or lesser value than the original property. Some small deviation (5 to 10% more) from this may be allowed. Consult with your CPA or Tax Attorney.
e. The replacement dwelling must have been acquired or newly constructed within two years of (before or after) the sale of the original property.
f. The owner must file an application within three years following the purchase date or new construction completion date of the replacement property.
g. The original property must be subject to reappraisal at its current fair market value; therefore transfers of the original property that are excluded from reappraisal (e.g., most transfers between parents and children) will not qualify.
3. I think that the sale of my residence may qualify for this benefit. How do I apply?
You must file a claim with the assessor, who will determine if the transaction qualifies. Claim forms should be obtained from the assessor’s office in the county where the replacement property is located.
Only certain counties have adopted Prop 90. In many of these counties, Prop 90 is coming up for renewal. Governor Pete Wilson extended the Prop 90 bill indefinitely, subject to the annual approval by each county in the program. It is imperative that you verify the individual county that they are still accepting Prop 90 transfers as the participation in this program changes year to year.
Summary of Qualifications For Prop 60 & 90
- The principal claimant must at least 55 years of age as of the date of sale of the original and the replacement residence.
- The property may be a single family residence, a unit within a cooperative housing project, condominium project, planned unit or a mobile home.
- The replacement residence value must, in general, be “equal to or lesser than” the value of the original residence. Equal to or lesser than is further defined on the reverse side of the application.
- The replacement residence must be purchased or newly constructed within 2 years, before or after, the sale of the former residence.
- The base year value of the original property cannot be transferred to the replacement dwelling until the original property is sold.
- A taxpayer is not eligible for the tax relief until they actually own AND occupy the replacement dwelling as their principal residence.
- The principal claimant must have been receiving or have been eligible for either the Homeowner’s Exemption or the Disabled Exemption on the original residence.
- An application/claim must be filed within 3 years of the date the replacement property is purchased or newly constructed.
- The Transfer of property tax is valid only 1 time unless you become disabled after using the age 55 exemption.
Applying For Prop 60/90:
To help expedite your Prop 60/90 Application the County Assessors will require:
- A copy of the tax bill from the other county
- A copy of the applicant’s birth certificate
- A copy of the Grant Deed for the new purchase, and
- A copy of the closing statements for both the sale and the purchase.
If you have any questions, the property tax office in Sacramento for all counties in California may be reached by calling: (916) 445 4982.
For more detailed information and/or the latest words on the propositions please go to the following online resource: www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm.